MCAN Mortgage Corp. said its profits dropped by 25 per cent to $4.8 million in the first quarter, primarily due to lower mortgage interest and fee income.
The Toronto-based company earned 33 cents per share for the period ended March 31, down from 45 cents in the year-earlier quarter when net earnings were $6.4 million.
In addition to lower income, the company said it was hurt by the absence of an upfront Canada Mortgage Bonds program securitization gain. That was partially offset by lower term deposit interest and expenses.
The mortgage portfolio’s overall yield decreased by 1.1 per cent from the fourth quarter, when it benefited from a strong performance in discount income realized on acquired mortgage portfolios.
The improving economy reduced the number of troubled mortgages as impaired mortgages as a percentage of total mortgages decreased from 5.81 per cent to 4.79 per cent, while mortgage arrears decreased by $7 million.
MCAN said it plans to expand its mortgage portfolio this year. It said there has been more interest in residential construction loans as the new housing construction market has improved.